MAG SILVER CORP. T.MAG

Fresnillo reports

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Quarterly silver production was up 4.2% vs. 3Q20 as a result of an increase in the volume of ore processed. This followed a quarter where fewer personnel were on site following Covid-19 preventive measures affecting employee attendance, development rates and equipment availability. While these measures continue to be enforced, better personnel management has improved production. Quarterly and full year silver production remained flat vs. both 4Q19 and FY19 due to a higher ore grade resulting from incremental improvements achieved following the implementation of our performance improvement initiatives, offset by a lower volume of ore processed for reasons explained above. Our performance improvement plan, as set out on the Capital Markets Day in December 2019, continues to be implemented. We continue to focus on controlling dilution and enhancing blasting and drilling techniques to cope with the narrower veins. Development rates increased to an average of 3,241m per month in 4Q20 (3Q20: 2,878m per month), marginally missing our target of 3,300m per month by year end, but a good performance given the impact of Covid-19 related personnel issues (including self isolation and quarantine). For the full year, development rates increased to 3,130m per month on average, up 3.1% vs. FY19 (3,037m per month) as a result of the ramp up of the tunnel boring machine and the new contractor hired at the end of 2019. Quarterly by-product gold production increased 2.0% vs. 3Q20 driven by a higher volume of ore processed, offset by a lower ore grade. Quarterly and full year by-product gold production decreased 19.1% and 26.5% vs. 4Q19 and FY19 respectively due to lower ore grades, lower volumes of ore processed and lower recovery rates. Silver ore grade in 2021 is expected to be in the range of 190 to 210 g/t, while the gold ore grade is estimated to be between 0.55 to 0.70 g/t.

Microsoft Word - 210126 4Q20 PR - V5 for Mexico clean (fresnilloplc.com)

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